Proposed minimum wage rise would harm staff

Labour’s manifesto promise to raise the national minimum wage to £5.35 in October 2006 could lead to retailers further reducing staff hours, cutting jobs and trimming back staff benefits, according to the British Retail Consortium (BRC).

BRC director general Kevin Hawkins said any increases in the minimum wage should reflect the current economic climate and the decision on the 2006 rate should be made in light of the state of the economy later this year.

“The minimum wage has reached a point where the principle and process need reassessing. Ill-thought-out and poorly-informed decisions will only have a detrimental effect on the economy,” he said.

“Many retailers, large and small, are now taking steps to offset some of these wage cost increases by reducing staff hours, cutting jobs and trimming back staff benefits.”